DBRS Assigns Provisional Ratings to BXG Receivables Note Trust 2018-A

DBRS, Inc. (DBRS) assigned provisional ratings to the following classes of Timeshare Loan-Backed Notes issued by BXG Receivables Note Trust 2018-A:

-- $49,810,000 Series 2018-A, Class A rated AAA (sf)
-- $33,141,000 Series 2018-A, Class B rated A (high) (sf)
-- $34,769,000 Series 2018-A, Class C rated BBB (sf)

The ratings are based upon a review by DBRS of the following analytical considerations:

(1) Transaction capital structure, proposed ratings and form and sufficiency of available credit enhancement.
-- Credit enhancement is in the form of subordination, overcollateralization, amounts held in the reserve account and excess spread. Credit enhancement levels are sufficient to support the DBRS-projected expected loss assumption under various stress scenarios.

(2) The ability of the transaction to withstand stressed cash flow assumptions and repay investors according to the terms under which they have invested. For this transaction, the ratings address the payment of timely interest on a monthly basis and principal by the stated maturity date.

(3) Bluegreen Vacation Corporation’s (Bluegreen) long operating history and its capabilities with regard to developing and managing timeshare resorts, as well as the origination, underwriting and servicing of Timeshare Loans.
-- DBRS has performed an operational risk review of Bluegreen and considers the entity to be an acceptable originator and servicer of Timeshare Loans.
-- The Bluegreen senior management team averages approximately 14 years of company tenure.

(4) The credit quality of the Transaction collateral and the consistent performance of Bluegreen’s Timeshare Loan portfolio.
-- Sufficient availability of historical performance data and a history of consistent performance on the Bluegreen Timeshare Loan portfolio.
--The statistical collateral pool is seasoned approximately ten months and contains Bluegreen originations from Q2 2009 through Q3 2018. The average remaining life of the initial collateral pool is approximately 110 months. The weighted-average FICO score of the pool is 718 (excludes obligors with no FICO, which is equal to approximately 1.1% of the statistical cut-off pool).

(5) The legal structure and presence of legal opinions that address the true sale of the assets to the issuer, the non-consolidation of each of the depositor and the issuer with Bluegreen, and that the issuer has a valid first-priority security interest in the assets and consistency with the DBRS “Legal Criteria for U.S. Structured Finance” methodology.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is Rating U.S. Timeshare Loan Securitizations, which can be found on dbrs.com under Methodologies.

Please see the attached appendix for additional information regarding sensitivity of assumptions used in the rating process.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

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